Record fuel bill takes toll on Emirates

Emirates Airline has become the latest carrier to report sharply reduced
profits on account of the high oil price, scotching the myth that its fuel
bill is heavily subsidised by the Dubai government

By Alistair Osborne, Business Editor

5:47PM GMT 10 Nov 2008

The Dubai-owned airline, which is on course to become the world's biggest carrier, said net profits for the half-year to September 30 dived 88pc to 2.36bn dirhams (£49m) as the record oil price took its toll.

Crude oil prices averaged $122 per barrel over the six months, against $67 for the comparative period in 2007, with Emirates' total fuel bill more than doubling from Dhs4.1bn to Dhs9.2bn.

Sheikh Ahmed bin Saeed Al-Maktoum, the airline's chairman and chief executive, said: "The first half of the year has been very tough for the airline industry, with record fuel prices forcing many carriers to shut shop or consolidate." Total unit costs – cost per seat per mile – rose 40pc.

Rival airlines have long claimed Emirates' fuel bill is subsidised by Dubai – a claim its directors have always denied. "These results show those claims are not true," said an Emirates spokesman.